Gold prices today fall for first time after rising for five days

Gold Price Chart XAUUSD Gold Forecast Federal Reserve Balance Sheet to Grow

Spot gold was last seen trading 0.3 per cent lower at $1,605.45 per ounce, having risen as much as 1.6 per cent earlier, following a jump of more than 3 per cent in the previous session.

On the Comex market in NY, gold for delivery in April, the most active contract, rocketed by as much as $131 an ounce or 8.4% compared to Monday's close, to trade at $1,698 an ounce by midday before paring some of those gains in early afternoon trade.

Gold market participants, meanwhile, are concerned about a supply squeeze in the market, following a sharp divergence in London and NY prices as the coronavirus closed precious metals refineries.

"There is no positive growth story here until business reopens, and that might see all these assets, that have been benefiting from the US Federal Reserve's (recent) stimulus announcement, including gold, come back down", said DailyFx currency strategist Ilya Spivak. The metal's prices in India are mirroring gains seen in the global market where spot gold rose close to 2 percent to $1,578.83 per ounce after the US Federal Reserve announced unprecedented measures to support the American economy. Gold futures were now trending at Rs 41,037 per 10 grams on MCX with an increase of 1.59 per cent or Rs 644.

U.S. stock index futures surged more than 3 per cent, while the dollar fell over 1 per cent against major currencies after the Fed's latest announcement.

Among other precious metals, silver was down 0.4% to $14.37 while platinum fell 1.6% to $726.48 an ounce.

At 11:51 am, benchmark equity markets benchmarks S&P BSE Sensex and NSE Nifty 50 were up 1.28 per cent at 27,014.98 and 1.19 per cent at 7,894.25 respectively, a day after Prime Minister Narendra Modi ordered a 21-day nation-wide lockdown to contain the rapid spread of the coronavirus.

The rupee traded higher against the U.S. dollar at 76.16 as compared to the opening of 76.06 and previous close of 76.22. "However, weaker demand outlook for India kept a check on upside", said Ravindra Rao, VP-head commodity research at Kotak Securities.

"Gold prices may find support at Rs 40,500 level and the resistance is placed at Rs 42,000 level on the MCX", Sajeja added.

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